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DuPont cuts Delaware research jobs, Pioneer to exit state

The DuPont Experimental Station on on Route 141 is shown on March 20, 2013. It dates to 1903 and is the birthplace of some of the company’s most successful products.(Photo: GARY EMEIGH/THE NEWS JOURNAL)Buy Photo

One of Delaware's greatest fears appears to be coming true: DuPont this week began eliminating hundreds of high-paying research and development jobs at the local research hubs where scientists developed some of its most profitable products, including Nylon, Tyvek and Kevlar

This week's cuts came ahead of DuPont's plan to consolidate its global scientific and engineering units.

The Wilmington chemical company is expected to merge its Science & Technology unit with DuPont Engineering, effective Jan. 1. Once combined, the new unit will operate as Science & Engineering. The move will result in a substantial redesign of the company's research and development activities.

Separately, DuPont's hybrid seed unit, Pioneer, will completely exit the state by March 2016, a move that could eliminate several hundred research positions. Headquartered in Johnston, Iowa, Pioneer has operations in DuPont's two Delaware research hubs: Stine Haskell and the Experimental Station. Some Delaware positions will be transferred to Iowa, but the majority of jobs will be eliminated.

Last year, DuPont spent $35 million to build a 134,000-square-foot soybean research center at Stine Haskell for Pioneer. Work on the facility, expected to be completed in 2016, will halt as a result of Pioneer's departure from Delaware.

DuPont announced the center's construction at an August 2014 ground-breaking attended by Delaware political and business leaders. Delaware Secretary of Agriculture Ed Kee called the research facility, an "investment by DuPont in the future of agriculture and that it is occurring in our state."

The DuPont Pioneer Delaware Soybean Facility was expected to be home to experts in seed genetics to test Pioneer's newest products. It was scheduled to include two automated, state-of-the-art greenhouses with three 60,000-gallon rainwater basins to harvest water for reuse.

DuPont opened its Experimental Station, one of the earliest industrial universities, in 1903.(Photo: Courtesy of Hagley Museum)

Several research positions, unrelated to the Pioneer departure, were also eliminated this week at Stine Haskell in Newark and the Experimental Station near Alapocas. While the exact number of job losses at the two locations is not immediately clear, the Experimental Station previously had 2,500 workers,while Stine Haskell had 600 employees.

Workers who survived the initial round of cuts could learn whether they have jobs in 2016 as early as Jan. 4, sources told The News Journal.

Built in 1903, the 150-acre Experimental Station is the birthplace of DuPont's most profitable products. Nylon, Kevlar and Tyvek were all created there along with the world's first synthetic rubber, neoprene. Stine Haskell is a multi-billion agriculture and chemical research facility.

The research cuts were part of overall job reductions across multiple departments in Delaware. Even smaller units, such as the Digital Printing segments' ink jet business line, were impacted by job losses, according to workers familiar with the cuts. More Delaware research jobs are expected to be trimmed in 2016.

DuPont spokesman Dan Turner declined to comment on the cuts or how many jobs will be lost in the state. Overall, DuPont had about 7,000 workers in Delaware.

The cuts are part of DuPont's plan to eliminate 5,000 positions worldwide, 10 percent of its global workforce, in an effort to slash $1.6 billion from its budget by 2017.

Many of those cuts are expected to occur ahead of DuPont's proposed merger with Dow Chemical Co., slated for completion sometime in 2016. Under the merger, Dow and DuPont would form DowDuPont, a $130 billion behemoth, and then separate into three independent companies: agriculture and chemicals, material sciences and specialty products.

DuPont announced the merger roughly one month after Chief Executive Officer Ed Breen took over the company.

Edgar Woolard, who served as DuPont's chief executive officer from 1989 until 1995, said it is difficult to understand why DuPont would target research, which has long been the lifeblood of the company.

"I haven't seen any action that the new management has taken that demonstrates they have a real interest in the long-range future of DuPont," he said. "I can't imagine they've spent enough time analyzing the activities that are going into R&D that they are capable of making any kind of reasonable decision about how much R&D is needed."

Jeffrey Sonnenfeld, a professor of business at Yale University, called the decision to slash research, "demoralizing."

"It is devastating to the state of DuPont, devastating to the frontier of knowledge that DuPont's brand and history represents and devastating to the integrity of DuPont's current leadership," he said.

The research cuts could also negatively impact Delaware. High-paying research jobs bring well-educated workers to the state, spending money on houses, eating out at restaurants and buying luxury items at stores. In addition, such workers pay a higher percentage of income taxes.

"I feel bad for Delaware and I feel bad for this company," Sonnenfeld said.

In a statement released by spokeswoman Kelly Bachman, Gov. Jack Markell said he is committed to supporting workers affected by the layoffs and will "emphasize the results that Delaware R&D has driven for DuPont" in talks about the company's future.

Members of Delaware's congressional delegation called job losses both, "sad" and "disappointing." All three vowed to keep employees impacted by the cuts in Delaware.

Rep. John Carney said he will promote the benefits of keeping DuPont operations and employees in Delaware. Sens. Tom Carper and Chris Coons, both Democrats, made similar pledges. Coons said he would work to ensure "the best outcome possible for our talented scientists and researchers," while Carper stressed the need for those laid off by DuPont to "find other opportunities to keep them here in Delaware."

DuPont, which generated $9 billion in revenue from internal innovations in 2014, has slashed its research budget slightly over the past three years. Last year, the company spent 5 percent, or $2 billion, of its $34 billion in revenue on research.

"They are not cutting the fat, they are cutting bone and muscle," Sonnenfeld said. "They are squandering a priceless resource that was built up and invested in for over 215 years."